Microgaming Casinos Set to Leave UK Market

The first real-market ripples of the United Kingdom’s new point-of-consumption tax are beginning to come into play, with a handful of Microgaming sites already confirming or reported to be making plans to exit the UK online gambling scene as early as August 1st.

Among the Microgaming powered companies confirmed as leaving the UK market are those properties belonging to the Fortune Lounge and Referback Groups, two major online-casino companies presently serving the UK market.

Other Microgaming casino sites have quietly leaked info regarding similar plans, but have not offered formal confirmation. The total number of sites deciding to leave the UK remains uncertain, though at Microgaming alone, it’s described as a “majority” of soon-to-be-affected skins. Speculation is rife that the mass exodus will begin August 1st, while existing players will be allowed to continue playing until October.

Not all Microgaming sites will leave the UK. UniBet and Betway are two sites that have been confirmed to be in possession of or will be applying for current United Kingdom licensing, with plans to continue offering services to UK-based gamblers.

Fortune Lounge is a multi-brand family comprised of the following: Royal Vegas (one of Microgaming’s oldest and most prominent brands), Platinum Play, 7 Sultans, Vegas Palms and Euro Palace. Fortune also owns the PokerTime online poker room and Giggle Bingo, an online-bingo site also powered by MicroGaming.

The planned exodus by the Microgaming skins begins even as other companies soon to affected by the UK’s new point-of-consumption tax ponder different legal options.

The Gibraltar Betting and Gaming Association (GBGA) has filed a formal protest against the new tax, which has already received royal approval and is set to go into effect on December 1st. Dozens of former UK-based gambling firms have relocated to the British Overseas Territory situated at the mouth of the Mediterranean.

Gibraltar is an autonomous jurisdiction and has established itself as an tax haven for online-gambling firms, which have redirected as much of their UK-based business as possible through the online, Gibraltar-incorporated sites to avoid a 15% levy applicable on profits derived from wagers physically placed in the UK.

The new point-of-consumption tax – also set at 15% — is designed to close that economic loophole. As much as 80% of the former land-based UK gambling traffic has been redirected through the online, Gibraltar-based sites. The UK Gambling Commission hopes to re-license as many as 150 new sites currently serving the country’s gamblers from locations outside the British isles, recouping as much as £300m a year in corporate levies.

The GBGA has written to the UK’s Secretary of State for Culture, Sajid Javid, declaring that the GBGA and its member companies intend to seek a judicial review of the new rules, which the organization claims are “unlawful” under European Union open-market treaties.

Among the GBGA’s assertions is that the new point-of-consumption tax offers no mechanism to capture tax revenues from firms who open defy the new levy by refusing to offer revenue reports to UK gambling authorities, while still servicing UK players from other jurisdictions. A recent GBGA presser claims, “This is bad for UK consumers, bad for the regulated industry, bad for Gibraltar and is in breach of European law, but fantastic news for operators who choose to avoid proper regulation”.